Federal Research and Development in Minnesota
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1 Chapter 24 Federal Research and Development in Minnesota Approximately $653 million of federal R&D funds are spent each year in Minnesota. Minnesota ranks 24th among the 50 states, District of Columbia, and Puerto Rico in terms of the amount of federal R&D dollars received annually. Approximately 8 percent of all federal funds spent in Minnesota each year on matters other than the direct support of individuals (i.e., such entitlements as retirement, disability, and housing assistance) is spent on R&D. DOD ~$312 million R&D contracts Other ~$43 million NASA, DOE, DOT, DVA, DOC, etc. EPA ~$14 million Mid-Continent Ecology Div. DOI ~$11 million Internat l Falls Biological Station Water Resources District Office Minnesota CFWRU Minnesota Field Station HHS ~$211 million FDA Minneapolis District Lab FDA Central Lab for Microbiological Investigations R&D contracts NSF ~$37 million Cooperative agreements USDA ~$26 million Forest Service R&D Work Site North Central Soil Conservation Research Lab North Central Forest Experiment Station ARS Research Facility at the University of Minnesota Figure 24.1 Sources of Federal R&D Dollars Spent in Minnesota (Total Federal R&D ~$653 million) 291
2 292 DISCOVERY AND INNOVATION Background In recent years, the federal government has spent in the neighborhood of $653 million annually in Minnesota on research and development (R&D) activities. On average, federal R&D dollars account for approximately 8 percent of all federal funds spent in Minnesota each year on matters other than the direct support of individuals (i.e., such entitlements as retirement, disability, and housing assistance). Most major federal agencies that currently support federal R&D efforts provide funding for R&D activities in Minnesota. Foremost among these agencies are the Departments of Defense (DOD) and Health and Human Services (HHS), which account for 48 and 32 percent of all federal R&D dollars spent in the state, respectively. The National Science Foundation (NSF), the Department of Agriculture (USDA), the Environmental Protection Agency (EPA), the Department of Interior (DOI), and the Department of Commerce (DOC), account for an additional 6, 4, 2, 2, and 2 percent of the federal R&D dollars spent in Minnesota, respectively. The remaining federal R&D dollars come collectively from the National Aeronautics and Space Administration (NASA), the Department of Energy (DOE), the Department of Transportation (DOT), and several other federal agencies. 24 All federal R&D dollars spent in Minnesota either cover the costs of operating federal R&D units in the state, including paying the salaries of federal R&D personnel working at these units, or are awarded as grants, contracts, or cooperative agreements to entities in the state. The following is an overview of what becomes of these federal R&D dollars once they arrive in Minnesota. Federal R&D Units in Minnesota Duluth, Minnesota, is home to EPA s Mid-Continent Ecology Division. The Mid-Continent Ecology Division is a unit of EPA s National Health and Environmental Effects Research Laboratory headquartered in Research Triangle Park, North Carolina. It 24 For a complete agency-by-agency breakdown of these R&D dollars, see Appendix C.
3 FEDERAL RESEARCH AND DEVELOPMENT IN MINNESOTA 293 provides scientific information on ecotoxicology and freshwater ecological effects to reduce the uncertainty in risk assessments and support risk management option selections. Located on the north shore of Lake Superior in Duluth, Minnesota, with a second site in Grosse Ile, Michigan, the division conducts research to address critical scientific issues facing the Great Lakes and Great Plains. This federal R&D unit annually receives approximately $13.2 million of federal R&D funds and has about 105 FTEs. Grand Rapids, Minnesota, is home to a USDA Forest Service R&D Work Site. The R&D Work Site is a unit of the North Central Forest Experiment Station inside USDA s Forest Service. It conducts research on the ecology and culture of the northern lake states and on riparian and aquatic ecosystems. Specific research activities of this unit include developing silvicultural management methods and developing aquatic and riparian classification systems. This federal R&D unit annually receives approximately $2.3 million of federal R&D funds and has about 20 employees. International Falls, Minnesota, is home to DOI s International Falls Biological Station. The International Falls Biological Station is a unit of the Columbia Environmental Research Center inside DOI s U.S. Geological Survey (USGS). It conducts research on fish communities in boreal lakes and reservoirs in Minnesota and Michigan, including Voyageurs National Park and Isle Royale National Park. Specific research activities of this unit include assessing the ecological impacts of exotic rainbow smelt and assessing the reproductive isolation between two northern pike spawning populations in Kabetogama Lake, Voyageurs National Park. This federal R&D unit annually receives approximately $71,000 in federal R&D funds and has one FTE.
4 294 DISCOVERY AND INNOVATION Minneapolis, Minnesota, is home to HHS s Minneapolis District Laboratory and Central Laboratory for Microbiological Investigations and a Department of Veterans Affairs (DVA) R&D unit. The Minneapolis District Laboratory and the Central Laboratory for Microbiological Investigations are units of HHS s Food and Drug Administration. These units conduct research on the safety and effectiveness of food and medical devices. Specific areas of research activity focus on pesticides and industrial chemicals. These federal units annually receive approximately $407,000 of federal R&D funds and have about five FTEs. This unit is scheduled to close in While the principal focus of the Minneapolis VA Medical Center is providing medical care to veterans, it is also the location of a number of research activities. In a recent year, this federally owned and operated facility was the site of 533 projects with total funding of approximately $7 million. These R&D activities focus on a wide range of topics, including neoplasms, emission-computed tomography, congestive heart failure, Alzheimer s disease, and diabetes. Morris, Minnesota, is home to USDA s North Central Soil Conservation Research Laboratory. The North Central Soil Conservation Research Laboratory is a unit of USDA s Agricultural Research Service (ARS) located on the campus of the University of Minnesota at Morris. It conducts research to develop and transfer new knowledge and technologies for sustainable agriculture in northern climatic regions that protect natural resources and the environment. Specific research activities of this laboratory include variable soil types within a farming/field unit that preclude uniform management, poorly distributed and intensive precipitation that causes water runoff and soil erosion as well as plant growth stress, and weed/pests management pressures that cause economic and environmental concerns. This federal R&D unit annually receives approximately $2.3 million of federal R&D funds and has about 34 FTEs.
5 FEDERAL RESEARCH AND DEVELOPMENT IN MINNESOTA 295 Mounds View, Minnesota, is home to DOI s Minnesota District Office of Water Resources. The Minnesota District Office of Water Resources is a unit of DOI s USGS. It oversees the R&D activities of USGS s National Water-Quality Assessment (NAWQA), Ground-Water Resources Assessment, Toxic Substances Hydrology, and Federal State Cooperatives programs. The NAWQA program conducts research on the nation s surface and groundwater resources to better understand the effect of pesticides, erosion, and bacterial contamination on water quality. The Ground-Water Resources Assessment program studies groundwater systems to develop models and simulations to better understand the workings of these systems. The Toxic Substances Hydrology program studies the behavior of toxic substances in hydrologic environments. These research activities investigate subsurface contamination at local releases and aquatic ecosystem contamination on a watershed and regional scale. The Federal State Cooperatives program studies the effects of agricultural chemicals, floods, droughts, and waste disposal on water supply and groundwater quality. This federal unit annually receives approximately $1.8 million in federal R&D funds. St. Paul, Minnesota, is home to DOI s Minnesota Cooperative Fish and Wildlife Research Unit Field Station and USDA s ARS Research Facility at the University of Minnesota and North Central Forest Experiment Station. The Minnesota Cooperative Fish and Wildlife Research Unit is part of DOI s USGS. It is on the campus of the University of Minnesota. It conducts research on the impact of human activities on aquatic and terrestrial ecosystems of state, regional, and national significance. Specific research activities of this unit include studying the ecology and management of boreal owls in northeast Minnesota, studying the breeding ecology and habitat use of red-shouldered hawks in Minnesota, and investigating the habitat associations and winter ecology of fer-
6 296 DISCOVERY AND INNOVATION ruginous hawks in eastern Colorado. This federal R&D unit annually receives approximately $175,000 of federal R&D funds and has about three FTEs. The Minnesota Field Station is a unit of the Northern Prairie Wildlife Research Center inside DOI s USGS. It is on the campus of the University of Minnesota. It conducts research on wolf ecology. Specific research activities of this unit include studying ways to restore the wolf population and studying wolf behavior to determine the reaction of other populations during ecosystem restoration. This federal R&D unit annually receives approximately $400,000 of federal R&D funds and has about four FTEs. The ARS Research Facility at the University of Minnesota is a unit of USDA s ARS. It consists of three research divisions focusing on plant science, soil and water management, and cereal rust. It conducts research on the fundamental processes controlling increased production, improved quality, and enhanced use of alfalfa, oat, wheat, and soybean and fundamental soil properties and processes affected by conservation tillage and residue management. Specific research activities of this facility include nitrogen fixation and assimilation, forage quality and persistence, plant disease resistance, and response to environmental stress. This federal R&D unit annually receives approximately $5.5 million of federal R&D funds and has about 53 FTEs. The North Central Forest Experiment Station, headquartered in St. Paul, is a unit inside USDA s Forest Service. It conducts research on the impact of global change on North Central forests, tree diseases, and ecosystem management and keeps a forest inventory. Specific research activities of this unit include investigating multiple approaches to improve disease resistance in trees, conducting inventories of the forests in the North Central states and researching the linkages and interactions between social systems and ecosystems. This federal R&D unit annually
7 FEDERAL RESEARCH AND DEVELOPMENT IN MINNESOTA 297 receives approximately $4.9 million of federal R&D funds and has about 125 employees. Federal R&D Grants to Minnesota Entities Every major institution of higher education in Minnesota is the recipient of significant federal R&D dollars each year through grants made by federal agencies to faculty, graduate students, and research centers. The vast majority of the R&D grants are made by HHS, NSF, DOE, and DOD to individual faculty members and therefore ultimately inure to the benefit of institutions such as the University of Minnesota system. The table below shows the number of R&D grants active in FY 1998, highlighting those made by HHS, NSF, DOE, and DOD to parties at this institution and estimates of the total dollars transferred to them in FY 1998 pursuant to the terms of these grants. Among the grants in the Other Agencies category going to the University of Minnesota are ones from NASA ($3 million), USDA ($3 million), the Department of Education ($2 million), and EPA ($1.5 million). Table 24.1 Sources of Federal R&D Grants to Higher Education in Minnesota Institution Other HHS NSF DOE DOD Total Agencies Amount # Amount # Amount # Amount # Amount # Amount # U of Minn Other $134M <$1M $26M $2M $7M $4M $10M <$1M $181M $2M 1, Total $135M 636 $28M 431 $7M 35 $4M 53 $10M 429 $183M 1,584 These activities are particularly significant because they fund much of the basic research so critical to expanding our knowledge and understanding of fundamental scientific phenomena. In addition, these funds account for a substantial portion of the dollars available each year to various academic departments within these institutions, such as the University of Minnesota Medical School.
8 298 DISCOVERY AND INNOVATION Several other nonacademic institutions in Minnesota also receive federal R&D grants each year. Foremost among the institutions that received R&D grants in FY 1998 were the Mayo Foundation in Rochester ($71 million), the Minnesota Agricultural Experiment Station in St. Paul ($5 million), the Minneapolis Medical Research Foundation ($4 million), and the Minnesota State Department of Health in Minneapolis ($3 million). Scattered among these grants, as well as among the contracts discussed in the section below, are small business innovative research (SBIR) awards. These are special awards made by the SBIR programs supported by the 10 federal agencies with annual budgets for extramural R&D of more than $100 million. In a recent year, small businesses in Minnesota received 64 SBIR awards totaling close to $11 million. Examples include a $750,000 award from DOD (Ballistic Missile Defense Organization) to Ross-Hime Designs, Inc., in Minneapolis for researching and developing an omnidirectional sensor mount and a $400,000 award from NSF to Xetex, Inc., in Minneapolis for work on a multifunction heat exchanger for control of temperature, moisture, and air quality. Also included among these grants are formula grants from federal agencies. Formula grants differ from the much more common project grants in that the money transmitted through formula grants is allocated to a state or one of its subdivisions in accordance with a distribution formula prescribed by law or regulation. Among the formula grants benefiting Minnesota are ones valued at more than $5 million from USDA s Cooperative State Research, Education, and Extension Service (CSREES) to State Agricultural Experiment Stations, forestry schools, and veterinary colleges for the support of research in agriculture, forestry, and animal health and disease. Similarly, a modest formula grant goes from DOI s USGS to the Water Resources Research Institute in Minnesota every year to foster research in water and water-related problems.
9 FEDERAL RESEARCH AND DEVELOPMENT IN MINNESOTA 299 Other Federal R&D Activities in Minnesota Several entities in Minnesota also receive notable sums in the form of contracts or cooperative agreements from federal agencies for specific R&D efforts. By far the majority of these funds go from DOD to United Defense, L.P., which in FY 1998 received close to $381 million primarily in support of the Army s Advanced Field Artillery System/Future Armored Resupply Vehicle (AFAS/FARV) program. In addition, Alliant TechSystems, Inc. ($49 million), Honeywell ($27 million), General Dynamics Corp. ($23 million), Lockheed Martin Corp. ($7 million), and the Mayo Foundation ($6 million) received large R&D contracts from federal agencies in FY Note that these amounts are in addition to the federal R&D grants also received by the Mayo Foundation. The University of Minnesota ($35 million) also receives contracts from various federal agencies to conduct R&D for the federal government. Although this amount is notable, it does not come close to eclipsing the funds that this institution receives from federal R&D grants. A total of $13 million of federal R&D dollars was also received in FY 1998 by entities located in Minnesota in the form of cooperative agreements. The largest of these cooperative agreements ($3 million in FY 1998) came from DOD (Air Force) to Honeywell, Inc., in Minneapolis to develop photonic and optoelectronic components for an advanced multifunctional C3I surveillance system. Other federal agencies awarding cooperative agreements to Minnesota-based entities include DOE, DOC, and NSF. Among these latter cooperative agreements is an award supporting one of NSF s Science and Technology Centers the Center for Computation and Visualization of Geometric Structures at the University of Minnesota. In addition, Minnesota is home to one of NSF s Materials Research Science and Engineering Centers at the University of Minnesota.
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